FOR IMMEDIATE RELEASE
June 4, 2010
MAYOR BLOOMBERG, GOVERNOR PATERSON, STATE SENATOR SQUADRON AND ASSEMBLYMAN WRIGHT ANNOUNCE AGREEMENT TO HELP NEW YORK CITY FAMILIES IN SHELTERS SAVE MONEY FOR THE FUTURE
Collaboration Among all Levels of Government Allows New York City to Place Funds Once Designated for Shelter Payments into an Interest-Bearing Savings Account
Mayor Michael R. Bloomberg, Governor David A. Paterson, State Senator Daniel Squadron and Assemblyman Keith Wright today announced an agreement that will help families living in shelters plan for the future. Beginning in September, money once designated for shelter contributions as a component of the State’s income contribution requirement, which applies to homeless households with earned income, will be redirected into an interest bearing savings account. Under this pilot program, the funds will be available for withdrawal when families leave city shelters and move into housing accommodations of their own. The Mayor and legislators were joined at the City Hall announcement by Deputy Mayor of Health and Human Services Linda I. Gibbs, Homeless Services Commissioner Seth Diamond and Human Resources Administration Commissioner Robert Doar.
“This is exactly how government should work – with both sides of the aisle and all branches of the government coming together to do something that will make a real difference in people’s lives,” said Mayor Bloomberg. “This agreement will help people build a nest egg and improve their financial literacy – skills that will go a long way towards making sure that those who leave the shelter system can successfully transition out of it.”
“Hard times and rising costs have hit everyone hard, and even many working families and individuals have been left with no choice but to stay in temporary homeless shelters,” said Governor Paterson. “The innovative approach we are announcing today will allow those in shelter who have earnings to begin to save money that otherwise would have gone toward their shelter costs. Those savings will allow them to build a nest egg to be used to facilitate their transition to permanent housing, with the goals of improving their chances of leaving the shelter sooner for permanent housing and moving them closer to self-sufficiency and economic security in the long run.”
“For working families, these nest eggs will be valuable resources in transitioning from shelter back to the community,” said Deputy Mayor of Health and Human Services Linda I. Gibbs. “Having saved while in shelter, they will be better prepared to be back on their feet and self-sufficient in their neighborhoods and own homes.”
“The goal is to help homeless families move out of homelessness, and the savings plan will do just that,” said State Senator Daniel Squadron. “It’s a rare agreement that everyone can get behind. I am pleased that Assembly Member Keith Wright and I, along with Mayor Bloomberg, Governor Paterson, Deputy Mayor Linda Gibbs, Deputy Secretary Kristin Proud, Commissioner Seth Diamond, Coalition for the Homeless, the Legal Aid Society, and Public Advocate Bill de Blasio have worked together to create this plan.”
“As the Chairman of the Social Services Committee in the New York State Assembly, I am proud to have reached a three way agreement on this intricate issue,” said Assemblyman Keith Wright. “Being from Harlem, I know that the problem of homelessness in New York City is one that needs to be addressed with compassion rather than contradiction and this legislation is a step in the right direction. Now people who rely on temporary housing will not be forced to pay rent and extend their reliance upon the safety net, but put away meaningful savings bringing them closer to financial independence.”
The implementation of the State’s income contribution requirement with savings accounts will allow New York City to meet its obligations under State law, while also promoting accountability and fiscal responsibility among families in shelters. The process will be facilitated by the City’s Human Resources Administration, which will invoice the families each month and then invest the funds into an interest bearing savings account. The funds collected will be available for withdrawal when families exit from shelter and will be available for use towards housing expenses, including furniture, household improvements and appliances.
“This is a tremendous opportunity,” said Homeless Services Commissioner Seth Diamond. “We will instill responsibility and self-sufficiency in our clients in shelter who are working, while at the same time doing something that will benefit them when they leave us to return to the community. Homeless families will use these important budgeting skills long after they leave shelter.”
Today’s agreement allows New York City to empower more individuals to become self-sufficient, while also preserving the core mission of the city’s homeless system—to temporarily shelter each and every family and individual in need of housing.
“By implementing this requirement we will be reinforcing the importance of public assistance recipients taking personal responsibility for their advancement up the economic ladder,” said Human Resources Administration Commissioner Robert Doar.
The City will assess amounts based on the State law cash assistance budgeting formula. Not all families with income must contribute. As income rises above the poverty line, the contribution increases. Families with incomes below the poverty line will only contribute a modest amount.
“This is a win for struggling New Yorkers,” said Public Advocate Bill de Blasio. “Allowing shelter residents to create savings accounts instead of charging them rent will help the homeless get out of shelter and back on their feet. I commend Senator Squadron, Assemblymember Wright and Mayor Bloomberg for working together to resolve this issue.”
“Today’s agreement is a tremendous victory for the thousands of New Yorkers who are working every day to get out of shelter and back on their feet,” said Mary Brosnahan, Executive Director, Coalition for the Homeless. “This is about helping shelter residents who have jobs, who work hard and who want to move out of shelter and into permanent housing build up savings to do just that. Thanks to the leadership of the Mayor, Governor, Senator Squadron and Assemblyman Wright this agreement creates a common sense solution that will help families move out of shelter once and for all.”
“This agreement will benefit thousands of vulnerable children and families who have entered New York City’s shelter system in need of a helping hand in the middle of the longest and deepest recession since the Great Depression,” said Steven Banks, Attorney-in-Chief, The Legal Aid Society. “The Legal Aid Society appreciates the leadership of Mayor Bloomberg, Governor Paterson, Senator Squadron and Assemblyman Wright in developing a common sense solution that will help families save so that they can leave shelter for permanent housing.”
In order to implement the savings account, an amendment to current law must be passed. Working with key legislators in Albany, City and State officials have come to an agreement to pass legislation as a component in the budget that would allow for the Income Contribution Requirement to be amended, including the mandated savings component. The legislation will be implemented as a savings plan pilot project this fall, and sunset on March 31, 2016.
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